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The Next Clintonomics

By David Ignatius

Where does Hillary Clinton stand on economic issues? More to the point, is she a "Clintonian," the heir to the pro-globalization views of her husband? Or is she part of the growing movement among Democrats that stresses equality and job protection over free trade?

Being Hillary, she's a little of both. She wants to position herself as a supporter of globalization and also as a pragmatic critic. The nub of that position is her statement that she will reevaluate NAFTA, the free-trade agreement with Mexico and Canada that her husband signed, and address its "serious shortcomings." Free-trade enthusiasts look at that position and cringe, fearing that she will break the globalization engine.

But after reading Clinton's economic speeches and talking with her chief economic adviser, Gene Sperling, I don't think anyone need worry that Clinton has become a hostage to the AFL-CIO. She's groping for a new balance between globalization and protection of workers, to be sure. She's a "post-Clintonian" on economics, you might say. She's reaching for what she calls a "new bargain" that will be fairer to workers while maintaining the basic pro-market stance that sustains economic growth.

Clinton's economic positions matter because, unfortunately, we're heading into a period when "it's the economy, stupid," all over again. The Federal Reserve warns that the U.S. economy is heading into a downturn, which by next year could become a full-blown recession. The tumbling stock market is signaling the same thing. As economic anxiety grows, the candidates' economic positions deserve a closer look, starting with the front-runner.

Clinton has two strands in her economic DNA. The first is her husband's enthusiasm for change and innovation -- and for the global economy that burst into full flower during his presidency. When you read Hillary's speeches, you hear echoes of what we may someday call Clinton I.

Here's her statement of the globalization credo in a May 31 speech in Silicon Valley: "You know it as well as anyone, the benefits that spring from globalization. It has lifted more people out of poverty around the world than probably any other advance in recent history. It has certainly helped expand our prosperity here at home. . . . So there is no escaping this, and what we have to do in America today is figure out how to best harness the force of globalization to ensure a continuing quality of life and standard of living."

Clinton used that speech to propose a nine-point program on innovation (she's big on multipoint programs, if you hadn't noticed) that at its core was vintage Bill Clinton. She talked about new programs to stimulate energy research, health research, broadband infrastructure, job training and education. You could hear an echo of the signature line of her husband's 1996 campaign, "building a bridge to the 21st century."

The other half of Hillary's economic DNA is that she's the daughter of a businessman from the Midwest. At her best, she has an instinctive feel for the economic security issues that worry Middle America. I've traveled with Clinton in Upstate New York, where she meets not with Manhattan's titans of globalization but with Rust Belt workers and managers. Clinton does well with these audiences -- not with her husband's "feel your pain" rhetoric but with very specific proposals on health care and income security.

Clinton sounds like a policy wonk when she talks about these issues, but after almost eight years of George Bush's botched syntax, that clarity and intellectual coherence are likely to reassure voters. An example is Clinton's proposal to create a 401(k) plan for all Americans, in which the government would match the first $1,000 of savings for families earning up to $60,000 a year. The plan goes to the heart of our biggest economic problem: our chronically low savings rate.

A sense of how Clinton might try to combine these two strands -- global and local, if you will -- can be found in an article by Sperling that appeared in the fall edition of the journal Democracy. Sperling argues that free-trade advocates need to recognize the squeeze on wages and job security that has accompanied globalization. He argues for flexible, pro-growth responses, such as adjustment assistance for laid-off workers, rather than the outright protectionism unions want. In his book "The Pro-Growth Progressive," Sperling explores the revised "social compact" with workers that Clinton seems to be working toward in her speeches.

With the economy on a downward trajectory, this is the wild card in the 2008 presidential race. Despite some straddles and a fondness for multisyllabic solutions, Clinton right now seems the candidate well positioned to take advantage of the pocketbook issue.

(c) 2007 Washington Post Writers Group

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